In 2016, Bend-based Deschutes Brewery made headlines with plans to locate its East Coast production brewery in Roanoke, Va. At the end of June, Deschutes closed on its $3.2 million purchase of 49 acres of hilltop land in a commercial park, complete with a view of the Blue Ridge Mountains surrounding the Roanoke Valley.
The brewery’s timeline, however, has changed.
Originally the deal included economic development incentives, such as purchase price forgiveness during a five-year period. However, those were tied to Deschutes beginning construction and opening the facility on a predefined schedule. Construction was set to begin in 2019, with beer in production by 2021.
Citing shifts in the craft beer market, the founder- and employee-owned brewery renegotiated the Roanoke land acquisition, removed the incentives and timeline to instead make it a straight cash purchase.
The business hasn’t announced changes to its plans to invest $95 million in the brewery and employ up to 154 people. Local and state government officials in Virginia stated that no incentives have been paid to Deschutes.
The modified deal gives Deschutes flexibility to handle a changing market while working toward its commitment to “open our East Coast doors knowing we’ll be a strong, lasting asset to the regional economy,” the brewery stated in a release. The land purchase also demonstrates commitment and good faith, says president and CEO Michael LaLonde.
“Now we can build the facility the way we need to for capacity reasons as we grow into the East Coast,” explains LaLonde. “We really worked with the mayor and council of economic development to make sure things still worked out for everyone. We’re in good shape now.”
LaLonde cites the brewery’s caution as stemming from slower industry growth the past two years.
“Usually it was growing in high single digits/low teens. We were growing in 2015 better than the market.”
Deschutes also recognized it needed to adapt in certain areas. “We didn’t have cans till this year. When canned craft beer was growing and bottled ales were in decline that put us in a difficult position. That impacted our business in 2017.”
In addition to canning, Deschutes made strategic decisions to improve operations and revenue. “We discontinued some brands that were doing well in the market, but we had a capacity issue. We also stopped selling 22-ounce bottles,” says LaLonde. “We’re feeling much better about market position, and we’re fairly bullish on how we think we’re going to pull for sales by the end of the year.”
In 2017, Deschutes installed a pilot brewing system in Bend and has been producing at least 20 experimental brews per month. “We are doing more tests than we ever have before, like hazy IPAs and lower-alcohol pilsners,” says LaLonde. “We have a lot of sour beers and dark beers we’re excited about. We rolled out a sour line, draft-only, and people are drinking them and loving them. They’re approachable by beer drinkers everywhere.”
To further demonstrate the Central Oregon brewery’s commitment to southwest Virginia, in August 2017 Deschutes opened a tasting room in the heart of downtown Roanoke, complete with a 20-gallon brewing system. July 14 will also see the return of the Street Pub, which benefits area nonprofits. The free, family-friendly event in downtown’s Elmwood Park will feature more than 50 taps and food from area chefs.
“We’ve been excited about Roanoke ever since we made the decision to locate there,” says LaLonde. “The tasting room has been successful. People passing through are excited about what we’re doing there. Community involvement is helping us do so much. I always look forward to visiting Roanoke to talk with community members and see how we can have a positive impact in the community.” •